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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: jim kelley who wrote (47105)	6/10/1998 8:12:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176388

Jim, when you write inventory down you do just that. You decrease the level of inventory and recognize an expense equal to the write-down. This is not a sales related issue. But you can't write inventory down that you don't own. Perhaps what you are talking about are returns from the channel that were previously reported as sales. Here, I would decrease the revenues, dollar for dollar (along with the number of units "sold") as they were originally recognized, and then write the inventory down. And of course any unit previously reported as sold that comes back should no longer be considered sold. That's why I have so much trouble understanding why Compaq accounts for things this way. It is as if they purposely obfuscate what's going on, and the only people fooled by this would be the shareholders. It seems to me that only units sold through should be counted as sales, because slaes into the channel ar more like consignment sales than anything else. TTFN, CTC